The Right Seniors Housing Investment for Your Investors
Aligning facilities with the right potential investors can be a helpful advantage in jumpstarting a transaction sooner rather than later. The amount of investors has grown exponentially as interest in the seniors housing market continues to rise. The Stahler Group has the potential to speed up this process through an extended network of successful investors.
Transparency, between both operator and investor, is a key component of the acquisition process for properties listed in the assisted living or other healthcare market places. Both parties can determine their expectations and concerns before continuing a transaction.
Important questions to ask:
- What kind of returns do we expect?
- How risks adverse are we?
It is important to gather as much information as possible as you narrow down the list of potential investments. Beginning the process with this kind of information will allow you to make a better decision while eliminating time and stress.
Product Types in the Seniors Housing Industry
- Independent Living (IL)
Of all the seniors housing investments, Independent living facilities are considered to have the lowest risk. Contrary to this belief, IL facilities are the first to feel the effects of a downward turn in the marketplace and are usually the last to recover during these periods. IL has the most fluctuating resident census because it is not an immediate necessity and the demand is lower. This makes the profitability less stable and is usually the first expense to go.
- Assisted Living (AL)
Assisted living facilities find support through private pay and government reimbursement which provide a majority of its income. Both of these models of payment are rarely used by the same facility. Operators of AL facilities require a larger skillset because of the degree of medical assistance that is required. Unlike IL, AL facilities provide need-driven services, allowing them to avoid downcycles in the industry. Facilities in the AL market prove to be more profitable on a per-unit basis than those in the IL facilities market.
- Memory Care
Although it is the smallest portion of the seniors housing industry, the Memory Care facilities marketplace continues to grow. Higher income rates have made Memory Care facilities an investment of choice for specialists. These rates reflect the higher level of care that is required for their residents. However, having a limited pool of residents to provide a service runs the risk of vacant beds. Investing in a Memory Care facility is well-suited for the investor looking for a larger role in the healthcare aspect while still maintaining a smaller interest in real estate.
- Skilled Nursing (SNF)
Of all the types of assisted living facilities, SNFs require the highest level of medical care for patients and need the operational experience to match. These types of seniors housing investments can expect little to no private pay because they rely mostly on government reimbursement. A model of this type has led investors to believe that skilled nursing facilities are subject to higher risks. This belief is slightly based on the fact that there are no guarantees that reimbursements will be made. Reimbursements are constantly subject to change, mostly by politicians who have the power to do so with the single swipe of a pen. Despite the risks, investors are still attracted to the possibility of yielding a high return and continue to drive the SNF industry.
Your Next Housing Investment at The Stahler Group, Seniors Health Care Real Estate Advisors at Marcus & Millichap
The Stahler Group has been committed to the highest level of investment services for premiere transactions all over the nation. Our team of experts has the knowledge and experience that is required to properly align investor and facility. This will initiate the entire transaction process and get your investment working for you much faster. Making these connections for our clients is our highest priority. The Stahler Group looks forward to developing a plan for your specific investment needs. Please contact us when you are ready for a complimentary valuation from our team of experts.